Remarkable third trial coming for RIAA’s first P2P defendant

Jammie Thomas, the first RIAA defendant to take her P2P case all the way to …

When Jammie Thomas (now Thomas-Rasset) became the first alleged P2P file-swapper to take her case all the way to trial and verdict, no one suspected that she would actually have three trials and verdicts, but that's the case today, as the RIAA rejected a federal judge's decision to slash Thomas-Rasset's damage award. Instead, we're headed to a truncated third trial on the issue of damages.

The recording industry also made it clear this week that both Thomas-Rasset and Joel Tenenbaum (the second P2P defendant to go to trial and verdict) are, in its view, quite terrible people: lying, deceiving, irresponsible, and unreasonable. And the industry can't understand why they're both fighting on.

Thomas-Rasset

Which is, when you look into the details, a pretty good question. Thomas-Rasset was first hit with a $222,000 damage award in her first trial, which the judge later vacated when he ordered a second trial. That second trial, in mid-2009, landed Thomas-Rasset with $1.92 million in damages. The judge, calling it a "monstrous" verdict, slashed it to $54,000 on remittitur, and he gave the recording industry a few days to decide if they would accept the lower award or proceed to a third trial.

The RIAA's answer came last night—and it simply won't accept the new award. It's not due to the price; in fact, the RIAA offered Thomas-Rasset a lower settlement if she would ask the judge to vacate his remittitur order. Thomas-Rasset refused, and her lawyers tell Ars that she will continue her refusal to pay anything.

The issue is the judge's decision to cap the damage award at $2,250 per song—triple the baseline $750 in statutory damages, but far from the upper limit of $150,000 allowed under the law.

The recording industry "regretfully must decline" this lower amount because of the precedent it would set. "Plaintiffs find it impossible to accept a remittitur that could be read to set a new standard for statutory damages—essentially capping those damages at three times the minimum statutory amount of $750 (or $2,250) for any 'noncommercial individuals who illegally download and upload music.' This far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact."

Copyright claims like this must be filed in federal court, an expensive and lengthy process. "The Court’s cap would set a new ceiling such that no copyright owner could effectively enforce their rights unless they could and did sue on numerous works," says the filing. "No copyright owner would be motivated to enforce its rights where it could only sue on a handful of works because the potential recovery would be too limited."

That's probably true, though the industry has always contended that both Thomas-Rasset and Tenenbaum downloaded and shared thousands of songs; even at a cap of $2,250 apiece, this could add up to serious money. Instead, the labels sued in each case on only a handful of the songs in question.

From the industry's perspective, the judge is essentially rewriting statutory damages law in the case of P2P file-sharing, and that's something it can't accept. As for why Thomas-Rasset wants a third trial, that's less clear. The judge has ordered that the new trial be "on the issue of damages," and it will apparently be devoted only to giving a third jury another crack at plucking damage awards from the air (which, in the absence of any real testimony about damages, is clearly what has been happening). But if Thomas-Rasset won't agree to pay a single penny, what's the point?

The other question is how Judge Michael Davis will react; will he simply cap the third award at $2,250 and present the parties with the same choices once more? If so, will we keep going round and round until a jury finally comes in with something less than $2,250 per song? At some point, does this simply become an unwillingness to allow the industry a jury trial?

One thing that remains clear is the RIAA's disdain for Thomas-Rasset, which was already obvious the last time around. "Her conduct throughout this litigation has been patently unreasonable," the lawyers assert. Also, she "chose to stonewall Plaintiffs and lie to two juries." Expect those points to be hammered home in a damages trial.

Tenenbaum

The industry isn't a fan of Joel Tenenbaum, either, who was hit with a $675,000 damage award in July 2009.

"Tenenbaum complains that 'Plaintiffs did their best throughout the trial to make him appear to the jury to be a liar, a perjurer, and a person dodging responsibility for his actions and blaming others under oath for his conduct,'" writes recording industry lawyers in a separate filing, also filed yesterday. "Of course, Tenenbaum ignores the fact that he is all of those things—and he has no one to blame but himself."

Then comes the clever wordplay. "Tenenbaum is the poster child for willful copyright infringement, and now he asks the Court to autograph that poster. The Court should do no such thing."

What's the issue here? One similar to the Thomas-Rasset case: possible precedential rulings. The RIAA is upset that Judge Nancy Gertner said she might have accepted the idea of a "fair use interregnum" before music was widely available online. To the labels, this is anathema.

"Even if such a supposed fair use interregnum did exist (which it does not), it would have no application here because the evidence at trial showed the availability of the works at issue in both physical and digital format long before Tenenbaum’s infringement," says the filing.

And, just in case Tenenbaum is getting any ideas about remittitur after watching the Thomas-Rasset case, the labels want to put the kibosh on that, too. "This too is ridiculous," write the lawyers. "The Court lacks the authority to interfere with a jury award that falls within the statutory range established by Congress. Furthermore, even if the Court were able to remit a statutory damages award in certain circumstances (a proposition Plaintiffs strongly dispute), this case represents a textbook example of where it would be entirely inappropriate to do so. The jury’s verdict represents only 15 percent of what the jury could have awarded."

The judges in each case have made no secret of their disdain for the RIAA methods; Davis (in Minnesota) actually begged for Congress to rewrite the law on statutory damages, while Gertner (in Massachusetts) has verbally horsewhipped industry lawyers for the way the whole legal campaign has been conducted. Given that, it looks unlikely that the RIAA will let these cases drop at the trial level, and appeals could eat even more years spent on such cases.

That might not be needed if the defendants would settle, but so far, neither looks likely to crack. So it goes.